Why old books should cost as much as new books

Why old books should cost as much as new books

What should determine how much you pay for an e-book?

Some people start out with thinking that an e-book should cost less than the p-book (paperbook) equivalent, since the publisher doesn’t have the same expense in materials, nobody has to pay to ship it around, there’s no storage, and no issue with returns.

However, most of that doesn’t have much to do with the production cost. I remember seeing something years ago that analyzed it (I don’t have the resource offhand…if I find it again, I’ll add it), and they thought it was about 12%.

That might seem strange, but most of the cost comes in labor, legalities, and risk.

Authors get paid. Cover artists get paid. Editors get paid. Proofreaders get paid. Publicists get paid. Lawyers get paid. Agents get paid.

Obviously, I’m talking about tradpubs (traditional publishers) here.

All those labor costs are for the specific book.

Other costs are longitudinal.

Very successful books pay for the publisher to take a loss on risky books, prestige books, and micromarket books.

The publisher has a building. The building has rent, mortgage, or property taxes.

The building has custodial staff, maintenance costs, maybe a security staff…

There are a lot of costs that are going to be the same whether or not some dead trees are involved.

That doesn’t mean that perhaps you shouldn’t pay a bit more for p-books…but I’m comfortable saying it’s not twice as much, just based on paper related costs (including moving it and storing it).

Another thing that seems weird to me that I see in the Amazon Kindle forums…”How can they charge ten bucks for that book…it’s like twenty years old?”

I’ve never understood that.

I do get two things about age of the work affecting price.

A “frontlist” title, which is new, is going to cost more usually. There are additional costs happening right then, including marketing costs (although how much is spend on that certainly varies…you’ll get some authors telling you that their publishers didn’t spend much). For A-list authors, for example, the publisher may be paying for them to go on a publicity tour…or even buying ads in traditional or new media.

There is also a higher demand when the book is first released. That’s basic economics: if people want it more, you can charge more for it.

Many people perceive a value in reading a book first. My favorite thing in a fictional work (book, movie, TV show) is to be surprised…and it’s not easy to surprise me.

For that reason, I really avoid spoilers…which may mean I try to get to something when it first comes out, to lessen the chances. Google, by the way, is apparently working on something that will block spoilers for you. In some way, it’s going to know where you are in the book or movie, and automatically screen, say, tweets for you to hide the information you haven’t reached yet (I assume you could choose to see it if you wanted…some things just can’t be spoiled, because it doesn’t have to do with what happens, but how it happens).

I also get why public domain books (books not under copyright protection) are cheaper…often free. I mentioned that one of the labor costs is royalties for the author…those don’t need to be paid for a public domain title. The book has already been edited and proofread.

What I don’t understand is why people think that a book which is still a desirable read after a couple of decades should cost less than one which is perhaps a year old (and now on the “backlist”).

Oh, I’ve had somebody argue that the publisher and author have already been paid for it by then.

That’s not the way we do it with a lot of other things which you “experience”, though.

Should the game Monopoly have become increasingly cheaper over the years, and once Parker Brothers had made a “reasonable profit” (whatever that is), it should be free?

They’d made the production and marketing budgets back on The Lego Movie within weeks of its release…should the ticket prices have gotten cheaper?

Does Fahrenheit 451 have any less value for a reader today than it did when it was first released?

That one is a good example…the price for it right now is $9.99 in the USA Kindle store.

That doesn’t seem unreasonable to me…and it’s ranked #3,579 of the paid in the Kindle store right now…close to the top 1%. That suggests that people don’t see it as outrageously overpriced.

If we look at the general science fiction bestsellers in the USA Kindle store, they are:

$4.81

$4.99

$11.84

$3.99

$10.99

$13.99

$3.99

$3.99

$3.99

$3.99

which is $6.66 average.

So, the “classic books” actually cost higher on average than the general group.

That does make sense to me…there is more likely to be cost competition on new books. I someone as likely to want to comparison shop 1984 as they are Ready Player One? My guess would be no.

Also, new books can be used as “loss leaders”. Again, as a former brick-and-mortar bookstore manager, I think customers are looking for bargains on the hot, popular books…they may be looking for those as gifts. If they find a good price on one of those books, they may be more likely to buy other (not as discounted) books from the same retail channel.

I do realize that I suggested that newer books might be more expensive, and yet the bestseller list was cheaper than the classics.

That’s in part because the bestsellers aren’t necessarily the newest ones, which are in the hardback equivalent stage.

I decided to do one more check: Science Fiction New Releases:

$11.84

$6.99

$8.99

$11.63

$5.99

$8.99

$8.79

$8.69

$2.99

$4.99

Average? $7.99…yep, the most expensive of the three (although still in the range of the classics).

Looks like at least the bestselling “older” books aren’t significantly cheaper than the newest books…and that seems reasonable to me.

How about you? Do you think a book which is decades old (but still under copyright and which still has a significant market) should be cheaper than a new release? Do you think part of what makes people think this is what they paid for the book originally (the price of p-books has risen considerably over the years)? What do you think should determine the consumer price of an e-book? Feel free to tell me and my readers what you think by commenting on this post.

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10 Responses to “Why old books should cost as much as new books”

Pricing is a difficult thing — there are many ways in a capitalist economy that prices get set. You seem to focus a lot on the cost of production — that’s a micro-economic way of looking at things: Cost of Goods Sold + administrative + marketing expense + profit = price. In a lot of competitive manufacturing industries, that’s a reasonable approach. A more classical economic theory would say that price is determined at the point where supply = demand — that’s a more macro-economic approach. Many more modern industries — especially in things like software would say that price is set by the relative “value” of the good or service for sale — costs are largely irrelevant (price is whatever the market will accept :grin) — typical profit margins in software can be anywhere from 40-80% (or more).

When we get into entertainment industries — especially books and movies, pricing tends to get screwy — first there’s no effective competition for a creative work only one producer/publisher gets to offer a specific product in the market place. Second there is the need/desire??? in entertainment industries (as you mention) to cross subsidize product. Third (especially in the movie industry) there are a host of arcane accounting rules designed to benefit “insiders” that further distort product pricing.

In the case of ebook pricing things are further distorted by the fact that the incremental cost of producing an arbitrarily large number of copies is effectively zero.

Given this latter fact, and positing that “demand” for a title (in the ebook case) is a reasonable proxy for “value”, I am of the opinion that for the majority of older titles the price should be lower because the incremental cost of bring those titles to market is close to zero, and for most “non-classic” titles demand/value is going to be low.

For “classic” titles demand will be higher (subject to who/how “classic” is determined) (as your classic sci-fi table shows), and so price should be higher.

I guess what I’m saying is that for products with no physical aspect, the only thing that matters is perceived value. The lower the value, the lower the price (an author/publisher can of course set prices high if they want, but quantity sold will drop markedly — we have already seen how low prices for medium grade (non-classic) titles can lead to very dramatic quantities sold (demand for pleasure books is extremely elastic)).

For most non-classic titles I posit that the most revenue will be earned if the price is set low commensurate with perceived demand. For most older non-classic titles IMO demand will lower than for newer non-classic titles.

That’s not to say that authors/publishers can’t rake in lots more revenue than they do presently — the key, however, is to set the price at the appropriate level.

Well, technically, I was focusing on other people focusing on micro-economics. 🙂 Hopefully, I made it clear that I was seeing other people saying that on the forums…I really don’t think there is much of a relationship at all between cost of production and prices, beyond a minimum sales price (and again, the load can be spread to other transactions even then).

One of the difficulties rightsholders will have is trying to predict demand for older titles. It’s easier to lower a price than to raise one (in the former case, people perceive it as a sale…and you can say it is “X amount off”).

I absolutely agree that pricing is very…and getting much harder. That’s why I find it hard to believe that publishers wanted to do it, via the Agency Model. I don’t think they were that naive…but perhapst they were.

Logically, I know that you’re right. However, I can’t get past the belief that books should gradually come down in price. I think part of it for me at least is past conditioning. The old model was, the book comes out in hard cover. If you really, really, really like the author, you fork over the big bucks for the hard cover edition. If not, you wait for it to come out in paperback at which time you can buy the less expensive paperback or pick up the hard cover edition at a significantly reduced price from the remainder pile. Now that E-books are part of the picture, that dynamic has changed but my expectations remain the same.

As somebody who is old enough to remember when hardcovers were under $10 and paperbacks were under a dollar, and e-books were rarely above $9.99, it’s annoying to still be charged $12.99 for the first e-book in a series when the next two books in the series have been released.

Yes, that’s a good point. I was thinking more of books that are a decade or more old…but we are seeing books that aren’t reducing much in their first few years of publication, unlike the tiered hardback/paperback pricing we used to see.

That wasn’t just because you wanted to read the novel yourself…hardbacks were often gifts, mass market paperbacks were often read yourself. You might spend $15 for a gift when you would only spend $3 for a copy for you to read.

I think, in the future, we may see the subsers (subscription services) as the equivalent of that paperback pricing. You pay the big bucks when it comes out if you want to own it: if you just want to read it, you wait until it shows up in your subser (such as Kindle Unlimited).

For that to work, either publishers will have to start putting more of their backlist in the subsers…or they’ll have to return rights to the authors more robustly, so the authors can do it.

A recent pet peeve is folks trying to sell Kindle books that are out of copyright for high prices for no obvious reason when the same book is also available from Amazon for free. For example, Amazon’s 100 book bucket list this week of Kindle books to read before you die includes Charles Dickens’ “Great Expectations” in a Penguin version, for several dollars, even though the photo shown is from a 99 cent Dover Thrift version Amazon also offers, and even though Amazon also offers the book for free.

I don’t mind paying 99 cents for an out-of-copyright book if the publisher has done some work to deserve it, and can’t expect Amazon to go out of its way to deny itself profit from such a sale. But if you just click on the first thing offered on such books, you may pay a LOT more than necessary, in return for very little.

Interesting to me that it a recent pet peeve, since Amazon stopped people from putting public domain books into the store without new copyrightable material (such as an introduction or illustrations or a translation…that sort of thing) about four years ago:

I think a lot of this expectation comes from other forms of entertainment. Movies will drop in price once released to DVD from as much as $25 or more down to $5 after just a few years. This includes so called classics. Same thing with video games only they usually stay over $60 and go down to $20. Music once had this drop but now that it has become digital you don’t see it as much of I am not as aware of it. If you look at classics though, prices are less than new releases.

So the question is why are books different then other forms of entertainment? They are competing with each other and should price themselves to compete.

Physical media is different because stores (and producers) get stuck with them and have to clear them out.

Amazon has now made the Instant Video store so hard to shop (in a browser) as far as I’m concerned, that I can’t easily compare the prices of older (but not public domain) movies to more recent (but not new releases).

So, based on that very small sample, it looks like older streaming movies may be somewhat cheaper…but I don’t see it as that different from books.

I don’t think books are that different, from what I’m seeing, but I also don’t think I see them as direct competition. I doubt a lot of people say, “I’ll either read a book, watch a movie, or play a game…whatever is cheapest right now.” That might happen, but it doesn’t feel like the choice people make to me (this is, of course, just subjective).

If you calculate the value based on minutes spent in the experience, books would compare very favorably to movies and music, and to some videogames (although the latter can be quite long). If a $9.99 book takes, say, five hours to read, that’s a favorable experience compared to a $8 movie which is two hours long.

Might be worth polling my readers about their content choices, to see when they choose one over the other. I tend to choose to do TV and a book at the same time, and sometimes music as well…but that might be unusual.

I’m not sure your comparison is all that meaningful — of the three “old” movies you selected, 2 got 4 (out of four) star rankings from Leonard Maltin’s Film Guide, and one (Forbidden Planet) got 3.5. In my book all of those movies are “classics” and their prices will be higher. Try pricing 3 older movies with 2-2.5 star rankings (still entertaining, but not the kind of thing that some prof at Cal Berkeley is going to wax poetic over :grin).

Certainly, that would be another interesting variable to compare, and I may do a post looking at several variables and price.

What I was looking to do was to challenge the assertion that I see that older books should cost less…they don’t usually specify anything about professors. 😉

Those were three that came to mind because I thought they would be likely to be available through streaming…I guess I have good taste (although some might challenge me enjoying Godzilla on Monster Island or The Creeping Terror). 🙂

If you are talking about stars in the Maltin book, I’d be happy to check if you name a few movies…if they aren’t in the public domain, I’d be curious as to how many movies would be available streaming if they weren’t regarded as “significant” movies.